Lenovo Rumored To Acquire IBM’s Low-End Server Business

Lenovo is a company that is known for its computers, such as laptops, and it looks like the company plans on expanding its server offerings because according to a report from The Wall Street Journal, a person familiar with the matter tipped them off that the Chinese company might be interested in acquiring IBM’s low-end server business. This is apparently not the first time that such rumors have made their way around the internet as last year, Lenovo and IBM were apparently in talks as well although the negotiations fell through due to differences in valuation.

Some believe that this is a win-win deal for both sides because by selling off their low-end server business, IBM will then be able to better focus more on software and services. As for what Lenovo is getting out of this is that they will be better equipped to compete in the server market in which they are currently considered to be a minor player. Given that cloud computing is the rage these days and with PC sales taking a dip, perhaps selling servers could be an alternative source of revenue for the company.

Lenovo has acknowledged that there are talks going on at the moment and that it is in the preliminary stages, but declined to acknowledge whether or not those talks might be about acquiring IBM’s low-end server business. This is not the first time Lenovo has acquired something of IBM as back in 2005, the Chinese company bought out IBM’s PC unit which was making a loss at that time, and turning things around for themselves. Of course even if Lenovo and IBM were to reach an agreement, the deal would have to be approved by regulators which could prove tricky as Lenovo would be seen as a foreign entity looking to purchase something belonging to a US company.